Search results

The internationalization process in recent decades has been discussed from different approaches. In this chapter, we study the evolution of selected Latin American and Spanish companies that have experienced a growing evolution from small or medium-sized enterprises to large corporations with participation in global markets and a strategic role played by the family organizations and small business groups. It is a study of multiple cases scope focused on two main lines of discussion. In one hand, the trajectories of internationalization and, and the other, the family firm organization and structure, correspondingly to sectorial aspects and the global situations that have encouraged the expansion of markets, the acquisitions of assets outside the countries of origin, and the outsourcing system. The group of companies selected to discuss the heterogeneity of the internationalization processes is based in case studies: Lojas Amerianas-Brazil, Crystal Lagoons-Chile, Despegar.com-Argentina, Sol-Meliá, Spain, Ferrovial, Spain, Talgo, Spain. Among the findings of this comparative study, the following stand out: (1) debates about the family business are alive, (2) multidimensional perspectives between countries are needed to understand not only internationalization but also the relevance of competitive learning, entrepreneurial vision evolution, and diversity of trajectories between sectors and companies, and finally (3) the importance of culture and immigration in business and family development from Small and Medium Enterprises (hereafter SME) to large businesses.

This chapter presents the current research status of family constitutions from an economics perspective. It locates the family constitution as part of the family and business governance structure of a family firm and the owner family. The typical structure and content of a family constitution are introduced. The chapter focuses on the status of research about family constitutions and provides a structured map for future research. With regard to extant research, it must be stated that the stock of literature is small. The contributions to literature are categorized in surveys; conceptual contributions; survey data; small sample, qualitative, empirical studies; and big sample, quantitative, empirical studies. The latter group includes three studies with a separate family constitution variable. This small number symbolizes that the family constitution still is an under-researched area. Therefore, family constitution research is far away from being able to answer central questions of advice-seeking owner families like, for example, whether a family constitution affects family performance, firm performance, or both; or whether the development process of a family constitutions disposes of an effect on family or firm performance separately from the hypothesized effect of the family constitution document.

The main purpose of the study is to examine the influence of family directors on the firm performance of public listed companies (PLCs) in Malaysia. This study provides empirical evidence on the agency problems between controlling shareholders and minority interests in the concentrated ownership setting.

Samples of the study are 112 PLCs in year 2006. Two measures of firm performance are used: return on assets (ROA) and Tobin’s Q. Managerial ownership refers to the percentage shareholdings of executive directors with direct and indirect holdings. It was further categorized into family ownership and non-family ownership.

In relation to ROA, managerial ownership is found positively significant. The results also show that the positive relationship between managerial ownership is contributed by the managerial-non-family ownership. In relation to Tobin’s Q, the results show a U-shape with turning point at 31.38% for managerial ownership and 28.29% for the managerial-family ownership. The results found significant and positive relationships between managerial ownership and both measures of firm performance which indicates that managerial ownership and family ownership yield greater efficiency.

The study highlights the effects of corporate governance on ROA and Tobin’s Q are somewhat different. It provides some evidence on the need to use appropriate measure of firm performance. The significant relationship supports the argument of Chami (1999), Fama and Jensen (1983), and DeAngelo and DeAngelo (1985) and empirical evidence of Lee (2004) that family ownership enhances monitoring activities.

Differentiating the types of managerial ownership into family and non-family categories enriches our knowledge about who actually contributes to the improved performance.

Rational use of the information available to companies is one of the strategic concerns for both family businesses and non-family businesses. The aim is to make the best use of the information resulting from data analysis in order to gain strategic advantage and to be more competitive as a company in all its functional areas. Experience indicates that emotions play an important role, especially in family businesses. Many maturation models exist to analyze decision-making processes (DMPs), but none from the perspective of family business cognition. The authors start from their own “Circumplex Hierarchical Representation of Organisation Maturity Assessment” (CHROMA) model (Parra, Tort-Martorell, Ruiz-Viñals, & Alvarez-Gomez, 2017), which was created to support decision processes in family businesses. This model was proven successful in the analysis of DMPs in large family businesses. The model was simplified as CHROMA-SHADE (Parra, Tort-Martorell, Ruiz-Viñals, & Alvarez-Gomez, 2019), more adequate for the analysis of small and medium-sized family businesses. Despite being a good DMP analysis instrument, intangible aspects such as family values and emotions have not yet been included. Both entrepreneurial emotions and entrepreneurial cognition must be taken into account when analyzing the DMP of the family business. In this chapter, the authors wish to explore attributes that can be introduced into a new dimension in the CHROMA model in order to make it more specific in the analysis of DMPs of family businesses regardless of size. The resulting FAMILY-CHROMA model represents a specific maturation model to evaluate DMPs based on the use of business information of family businesses.

This chapter provides an introduction to the world of family companies and family constitutions from a legal perspective. It first studies the legal types of business organizations that family firms have chosen across time and jurisdictions. It then illustrates how early predecessors of family constitutions evolved in the late Middle Ages and what modern family constitutions look like in different countries today. Further considerations are devoted to the governance framework of family firms. The chapter concludes by exploring the potential legal effects of family constitutions under German company and contract law.

In recent years, the corporate governance structures of family businesses have become increasingly important to the public. This is due not only to the increasing number of corporate successions but also to the (still) lower degree of formalization of corporate governance in family-owned companies. In this chapter, the authors analyze theoretical and empirical findings on family governance with a focus on family constitution and present the results of their own exploratory empirical survey conducted in 2017.

Family constitutions are relatively new to the law of family companies, although there might have been forerunners in the history of entrepreneur families. The practical importance and the proliferation of family constitutions in German family companies are increasing, along with the discussion of family constitutions in legal literature. This new instrument of family governance is not law driven but business driven, it has been designed by business advisors. Its analysis and classification are still at the very beginning in academic research and practice. Even though family constitutions are generally deemed to be without any legal effect and not legally binding, from a legal point of view, this assumption is at least highly questionable.

There exists a shortage of studies that establish linkages between entrepreneurial orientation and debt financing in family businesses. In line with this research stream, the purpose of this chapter is to examine the relationship between entrepreneurial orientation and debt financing of family businesses. Specifically, the study investigates how the five entrepreneurial orientation dimensions – risk-taking, innovativeness, proactiveness, competitive aggressiveness, and autonomy influence family business debt financing. By adopting a qualitative research methodology and based on empirical evidence gathered through a 10-case study design involving face-to-face interviews with owners of family businesses in Nigeria, the study examines the influence of entrepreneurial orientation on debt financing. The results suggest that the entrepreneurial orientation of family businesses seems to play a pivotal role in influencing debt financing. If a firm is entrepreneurial-oriented, it is reasonable to expect that it will focus attention on new and emerging opportunities for obtaining debt financing. The study advances research on entrepreneurial orientation and debt financing in family businesses. It develops an empirically theoretical framework at the intersection of the family business and entrepreneurial orientation research, filling a gap in the literature. Future research could substantiate the findings of this study on a broader empirical base, using quantitative methods. This study offers a new perspective to the study of entrepreneurial orientation and, at the same time, contributes with findings from research on entrepreneurial orientation to the study of debt financing in family businesses.

Family shareholders expecting to fulfill their responsibility of aligning management interests with shareholder priorities and holding management accountable need a thorough understanding of financial statements. They need to be able to make sense of what the numbers say about the firm and its competitiveness. Financial literacy is, therefore, essential knowledge for every shareholder, not just the ones active in the management of the company. Without it, the desirable alignment of management and shareholders is at risk. Without it, family-business shareholders can easily become just as indifferent or impatient, fickle, and greedy as hedge fund managers and investors on Wall Street. The latter, aided by analysts and the media, often pressure well-managed publicly traded companies into short-term thinking.

The notion that the family have a profound effect on human behavior is indisputable and has been studied extensively, including business administration. However, these studies have focused on developed countries. So, it can be identifying a research gap related to understand these countries, especially from a contextual perspective, which is the one that has received less attention from the academy.

This paper presents a theoretical review of the contextual perspective of the study of family businesses that concludes with the proposal of a model that integrates the structural barriers to contextualize the analysis family businesses in emerging economies, especially in rural zones.

Three case studies of companies located in the Puuc biocultural region in Yucatan, México, are presented and discussed.

The cases presented are family businesses: “Vida Vida,” “La Vaquita,” and “Lool-Beek” in which similarities were found in the way they face the particularities of their environment and how the integration of family members responds to uncertainty due to the precarious legal framework and the scant economic development they face.

This paper proposes that the structural barriers faced by emerging countries should be integrated as a differentiated variable, especially those located in rural areas since there imply greater challenges than urban areas. Likewise, it highlights that the emotional connections of family businesses with their territory give them roots, and this contributes to the continuity of their businesses and empowers them to face challenges such as natural disasters and the COVID-19 pandemic.